Legendary Stock-Picker Predicts Best-Performing Stock of 2020

Double-Digit Gains in the S&P 500 Index Over the Next Year?

The fall in the fear gauge is actually a sign of more gains ahead. In fact, you can expect double-digit gains in the S&P 500 Index over the next year, based on what’s happening right now.

By Chris Igou, analyst, True Wealth


In March, the market’s “fear gauge” hit its highest level since 2008.

That was during the height of the coronavirus pandemic. The market was crashing. And folks were terrified.

Today, fear in the market has subsided as stocks close in on new highs. It’s more than that, though…

This fall in the fear gauge is actually a sign of more gains ahead. In fact, you can expect double-digit gains in the S&P 500 Index over the next year, based on what’s happening right now.

Let me explain…


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Longtime readers know that when I refer to the market’s “fear gauge,” I’m talking about the CBOE Volatility Index (“VIX”).

When uncertainty shows up in the market, people get scared… and the VIX starts to move higher. It can be a great contrarian indicator, showing when folks are giving up on stocks.

Now, we know we want to buy after folks get scared. But remember, uncertainty can always drive the VIX higher than you can imagine.

So instead of just looking at when the VIX hits new highs, we want to see what happens when that fear starts to dissipate.

Again, the VIX spiked in March as pandemic fears took over. But it has fallen recently. While this measure peaked above 80, it’s now below 35 again.

To see what happens when fear subsides, you need to look at every time that the VIX rose above and fell back below a level of 35… like we saw recently. These spikes highlight fear extremes and let us know when things are getting back to normal.

Now that there’s less coronavirus uncertainty in the market, the VIX is back down. Take a look…

You can see the massive spike in the VIX in March. But levels have fallen dramatically since then.

Historically, when the VIX falls back from record highs, it’s a good sign for U.S. stocks. And that means now is actually a great time to buy.

Since 1990, we’ve seen 41 other times that the VIX has rallied above and fallen back below 35. And buying after these extremes often leads to outperformance…

Similar extremes have led to winning trades 82% of the time over the next year. And history shows you can expect solid outperformance compared with a buy-and-hold strategy…

Previous instances have led to 6% gains in six months and a solid 12% gain over the next year. That crushes the typical 7% annual return.

Simply put, the VIX falling back to more normal levels is an “all clear” sign to own stocks, based on history. And that’s happening right now.

It might seem crazy, but now is a fantastic time to buy. History says more gains are likely on the way.

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Big Gains for Contrarian Investors?

The pessimism we’re seeing now tells me the S&P 500 Index, Dow Jones Industrial Average, and Nasdaq Composite Index are headed higher. If so, it’ll mean big gains for contrarian investors – and big losses for those caught on the short end of the trade.

Editor’s note: Did you miss it? Earlier this week, Steve held an online event to share why real estate is booming today. He says right now – in the wake of a global pandemic – we’re getting a “perfect storm” for Americans to invest in this lucrative asset class. And it’s time to act…

His brand-new project is an easy way to do it through the stock market. You’ll even have the option to get in on private real estate deals – something we’ve never been able to facilitate before. And for a short time, you can join us as a Charter Member for 66% off the normal price. So don’t wait… Watch a replay of the event to learn more.


By C. Scott Garliss, editor, Stansberry NewsWire

You should always be a little scared of consensus…

When everyone’s on the same side of a trade, it typically goes against them.

The reason for this is simple: If everyone’s bullish on an idea at the same time, who’s left to buy and push it higher?

The only momentum that’s coming is likely to be lower. And the opposite is true, too…

Investors today are betting that the market will fall. They’re piling into the same shorts. And as the downside bet increases, a market rally becomes that much more likely.

The pessimism we’re seeing now tells me the S&P 500 Index, Dow Jones Industrial Average, and Nasdaq Composite Index are headed higher. If so, it’ll mean big gains for contrarian investors – and big losses for those caught on the short end of the trade.

Let me explain…


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Short-selling may seem complicated at first. But it’s actually very simple.

To short an investment, you sell it up front, knowing you’ll have to buy it back at a later date. The trick is that you hope to buy it back at a lower price.

If you “sell high and buy low,” you make money on the trade. You’re betting the price will fall.

It’s the reverse of a typical “long” investment – where you buy expecting that the stock will go higher. But there’s another key difference many investors don’t think about…

When a long investment goes against you, your losses are limited. A stock can only fall to zero – it can’t go any lower. But there’s no limit to how high a stock can soar. So when a short investment goes against you, your downside is infinite.

Right now, investors are overwhelmingly bearish on stocks. To see it, let’s look at the most recent Commitment of Traders report…

This is a weekly report produced by the Commodities Futures Trading Commission. It shows us what futures traders are doing with their money.

According to the data, the net short position for the S&P 500 is the largest it has been since 2011. Take a look at the chart below…

Now let’s look at the Dow Jones Industrial Average. Here, the net short position is the largest on record…

You get the idea. And it’s a similar story with the Nasdaq, too. The net short position increased last week to 1,800 contracts – the largest amount of short interest since 2011.

All this means one thing…

If the stock market keeps going up, all these short traders will need to get out. They’ll need to cover their positions and buy them back.

Typically, that doesn’t happen until it’s too late. At that point, it will be like trying to put out a fire with lighter fluid. Prices could absolutely soar as traders scramble to buy and close their positions.

Importantly, this isn’t the only sign that the market’s pessimism has gone overboard…


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We can also see it in the recent survey from the American Association for Individual Investors (“AAII”). This poll asks investors where they think the stock market is headed over the next six months. It’s simple – they’re either bullish, bearish, or neutral.

According to the most recent report, 48.9% of respondents were bearish. That’s well above the historical average of 30.5%.

On the other side, bullish sentiment came in at just 24.1%, well below its historical average. This shows individual investors are still scared of the market. They’re not prepared for a move higher.

Bearish investors stand to lose a lot of money when this situation reverses. But you don’t have to be one of them…

As investing legend Warren Buffett likes to say, “Be greedy when others are fearful and fearful when others are greedy.”

Today, investors have too much money riding on a move lower. We’re likely to see the opposite. And that tells me it’s time to be greedy.

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Teeka Tiwari: My Disturbing Wall Street Discovery

Teeka Tiwari: At the beginning of the second quarter of this year, I noticed a string of strange anomalies in my trading data. The trading action was so far off the norm, I knew there had to be a flaw somewhere in my data collection.

By Teeka Tiwari, editor,  Palm Beach Daily

Sometimes, a $1.4 billion fine is just the price of doing business.

For most companies, it’d be a death blow. But for Wall Street bankers, it’s barely a slap on the wrist.

Let me explain…

After decades of bad behavior, Wall Street’s misconduct truly got out of hand during the dot-com bubble in the late 1990s. It was so bad, the Securities and Exchange Commission (SEC) launched one of the biggest investigations in its history.

In 2003, the SEC hit Wall Street and 10 of its biggest bankers with a $1.4 billion fine.

In one example, analysts from Credit Suisse published false reports on Digital Impact, an early dot-com marketing company. Undisclosed to the public, bankers at Credit Suisse held a stake in the company.

Likely, millions of dollars flowed into Digital Impact’s stock thanks to favorable ratings. All the while boosting the value of Credit Suisse’s stake in the company.

In 2000, the 10 firms charged had made over $213 billion… That’s in just one year.


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Put together the decades of unchecked abuse, and the $1.4 billion “fine” becomes meaningless in comparison.

But all of that is old news now.

The reason I’m writing to you today is because Wall Street is yet again up to its old tricks of feeding off the savings of America…

My Disturbing Discovery

At the beginning of the second quarter of this year, I noticed a string of strange anomalies in my trading data.

Data that had been working for years suddenly went “wonky.” Trades built on sound methods and data started failing.

The trading action was so far off the norm, I knew there had to be a flaw somewhere in my data collection.

That’s when my team and I started a three-month journey to get to the bottom of what was happening to the data feeds my subscribers and I rely on.

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It wasn’t easy. We’ve spent over $1 million researching it, including consulting with experts… buying massive data sets… and building algorithms from the ground up with a whole new data set.

Here’s what I found…


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Big Wall Street firms, hedge fund managers, and big-money men of every ilk were making public statements that had the effect of changing the data we see on our charts.

At the same time, they were relying on a different way to “hide” their activity (much of which was opposite to their stated positions), that it never showed up in the charts you and I rely on.

These aren’t trades you’ll see on the New York Stock Exchange ticker tape. They don’t show up on volume charts. And you’ll never have the chance to get in on them.

In fact, our research suggests 40% of all trading will never show up on the public charts.

No wonder my performance was lagging. The good news is, once I factored this data in, our trading results improved dramatically.


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Just to be clear, what Wall Street is doing is completely legal. But it’s still deeply disturbing.

It tarnished the reputation of one of my heroes… and revealed how Wall Street is making out with billions in profits.

On Thursday, June 25, at 8 p.m. ET, I’ll reveal exactly how Wall Street is secretly getting away with billions of dollars in profits by misleading the public.

More importantly, I’ll show you how you can use this data for yourself. So don’t get mad… get even, by joining me next Thursday.


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During the event, I’ll also show you how I’ve been using this simple strategy to generate backtested trades that yield an average of $19,740 from a simple two-minute trade. So don’t delay, click here to reserve your seat.

U.S. Stocks are in an Uptrend. Now is not the time to sell.

History says that uptrend has plenty of room to run. It might seem crazy, given what’s happening in the world. But history says the rally can continue.

By Chris Igou, analyst, True Wealth

The S&P 500 is darn close to all-time highs…

We’ve come a long way from the market’s bottom on March 23. And if the recent rally in stocks has felt crazy to you, that’s because it has been.

The move to the upside has been relentless. And it made history along the way.

The U.S. market set a record recently. It was the first time in at least 70 years the S&P 500 rallied 37% in just 50 trading days.

Importantly, similar 50-day rallies have only happened a handful of times since 1950. But it’s no reason for fear… Similar runs point to 20%-plus gains over the next year.

Let me explain…


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The first half of March felt like a death blow to the U.S. market. Stocks fell 34% in a little more than a month. It was one of the sharpest declines since the 1930s.

But the fears that sent the stock market crashing have started to subside. Businesses are opening back up across the U.S. And the market has been rebounding at an impressive rate.

The S&P 500 is back in an uptrend. We are about 10% away from making new all-time highs once again.

In the process, U.S. stocks rallied 37% in 50 days. That’s a rare occurrence of momentum. Take a look…

The incredible rally was a one-way trade over the past three months. Stocks continued to go up, up, up.

That fact has folks scared. Many of the COVID-19 worries are still out there. Yet stocks have been soaring. It’s hard to make sense of. History says we shouldn’t worry though…

Since 1950, buying after 50-day rallies of 25% or more has been a winning move. It has led to winning trades 100% of the time over the next year. And you can expect big outperformance along the way…

You probably have an idea of what to expect from long-term market returns… Over the past 70 years, a typical annual return is 7.5%. Your upside potential is much larger when you buy after extremes like today’s, though…

Similar 50-day rallies have led to 9% gains in three months, 14% gains in six months, and an impressive 23% gain over the next year. That dwarfs the typical return for stocks.


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In short, U.S. stocks are in an uptrend. And history says that uptrend has plenty of room to run.

It might seem crazy, given what’s happening in the world. But history says the rally can continue. Now is not the time to sell.

Which Stocks Are Making The Biggest Gains Now?

The stocks that are making the biggest gains are the ones most investors are eyeing. This means it’s a good idea to keep focusing on big, household names. And as I’ll show you, these companies have a major advantage in a crisis thanks to cold, hard cash.

By Dr. David Eifrig, editor, Retirement Millionaire


Where do you get your edge?

The “efficient market” hypothesis tells us that stock prices reflect all available information at any point in time… But we all know that’s not always the case.

You can earn bigger returns. Otherwise, the best anyone could ever do is track the market.

Oftentimes, the eye-popping returns come from small growth stocks. Those are the ones with more room to grow, and Wall Street doesn’t watch them as closely. That’s why speculators have long loved to dabble in small-cap stocks.

But today, we’re seeing something different…

We’re not seeing the biggest returns in the smaller stocks. Rather, the stocks that are making the biggest gains are the ones most investors are eyeing.

This means it’s a good idea to keep focusing on big, household names. And as I’ll show you, these companies have a major advantage in a crisis… thanks to cold, hard cash.


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Stocks with market capitalizations of more than $200 billion, known as “mega-caps,” have been generating the biggest returns in recent months and years.

As you can see, mega-cap stocks have done much better than small-cap stocks over the past year. They were outperforming before the COVID-19 crisis. And it’s still true today…

Currently, 25 stocks in the S&P 500 Index have market caps exceeding $200 billion. And all of them are household names… including Amazon (AMZN), Facebook (FB), JPMorgan Chase (JPM), and Verizon (VZ).

Out of the 25 mega-caps, two of the top three biggest winners over the last 12 months are both worth more than $1 trillion… Apple (AAPL) and Microsoft (MSFT). Nvidia (NVDA), which has a $230 billion market cap, has been the biggest winner with a gain of about 150%.

The question you should be asking is: How could Apple and Microsoft, the two biggest companies in the U.S., each gain more than 50% over the past year?

These are two of the most heavily scrutinized companies in the U.S. stock market. You can’t flip on CNN without hearing about either of them. Yet they’re not acting like massive, mature stocks.

Some will point to the rise of passive investing as a reason for this incredible gain… and that may be a factor. After all, when people pump money into mutual funds that track big, weighted stock indexes, like the S&P 500, more money flows into the bigger names.

But I think the main reason is more obvious…

Investors are risk-averse and don’t want to take chances on uncertain businesses.

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In the wake of the COVID-19 crash, investors are still wary about most stocks. No one who remembers the financial crisis of 2008 wants to get burned in another one.

So many are too afraid to stray away from proven businesses with economic moats. And you don’t get to be a mega-cap without a proven business model.

It’s important to know one more thing… Mega-cap stocks also bring in loads of cash. And as a shareholder, piles of cash help you sleep at night. Cash helps a company handle market downturns better than others.

Longtime readers know we like to look at a company’s free cash flow (“FCF”) as an indicator of its financial strength…

That’s the cash a company generates from its operations minus capital expenditures. It’s the amount available for management to buy back stock, issue dividends, and make acquisitions.

For us as shareholders, we want companies that generate lots of cash on less revenue. We measure that by looking at FCF margin – or FCF divided by sales.

Mega-caps, by far, have higher FCF margins than the rest of the S&P 500 and small caps…

In other words, for every dollar of sales, mega-cap stocks are left with about $0.18 of FCF available for shareholders. We consider a company with an FCF margin of 10% to be healthy.

Investors pay a premium valuation for that profitability. Mega-caps have an average price-to-earnings (P/E) ratio of 29, while the broader S&P 500 Index trades for around 22 times earnings.

Still, investors don’t mind paying up, given mega-caps’ safety. Share prices will fluctuate, but investors know that these giants won’t go belly-up anytime soon.

And as always, buying begets buying. The more investors gravitate to mega-caps, the more prices rise, which leads to more folks buying them. This is called “herd mentality.” People see their friends making money on Apple and Microsoft, so they want in on the action.

We expect the momentum will feed itself. Money will continue to flow into these big stocks… The winners will keep winning.


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Recently, Doc has highlighted the risks of investing in small companies right now… the phenomenon of COVID-19 “superspreaders”… and one investment that he believes will compound your long-term wealth, even through the pandemic. You can read all these stories and more in his free Health & Wealth Bulletin. If you’re ready for daily insights about how to protect your wealth – and health – this year, go here to check it out.